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Accounting Chapter 21 Homework Discount Bonds Payable Difference Cash 5

Page Count
14 pages
Word Count
2808 words
Book Title
INTERMEDIATE ACCOUNTING WITH AIR FRANCE-KLM 2013 ANNUAL REPORT 8th Edition
Authors
David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
Problem 2111
ARDUOUS COMPANY
Spreadsheet for the Statement of Cash Flows
Dec.31 Changes Dec. 31
2015 Debits Credits 2016
Balance Sheet
Assets:
Cash 81 (21) 35 116
Liabilities:
Accounts payable 65 (4) 15 50
Shareholders' Equity:
2182 Intermediate Accounting, 8/e
Problem 2111 (continued)
Spreadsheet for the Statement of Cash Flows
(continued)
Dec.31 Changes Dec. 31
2015 Debits Credits 2016
Statement of Income
Revenues:
Sales revenue (1) 410 410
X Noncash investing and financing activity.
Problem 2111 (continued)
Spreadsheet for the Statement of Cash Flows
(continued)
Dec.31 Changes Dec. 31
2015 Debits Credits 2016
Statement of Cash Flows
Operating activities:
Cash inflows:
From customers (1) 414
Net cash flows 82
Investing activities:
Sale of machine components (11) 17
Problem 2111 (concluded)
ARDUOUS COMPANY
Statement of Cash Flows
For year ended December 31, 2016 ($ in millions)
Cash flows from operating activities:
Cash inflows:
From customers $414
Cash flows from investing activities:
Sale of machine components 17
Cash flows from financing activities:
Retirement of bonds payable (60)
Net increase in cash 35
Problem 2112
Requirement 1
Retirement of common shares ($ in millions)
Common stock (5 million shares x $1 par per share) ............................... 5
Net income closed to retained earnings
Income summary .............................................................................................. 88
Declaration of a cash dividend
2186 Intermediate Accounting, 8/e
Problem 2112 (concluded)
Requirement 2
BRENNER-JUDE CORPORATION
Statement of Retained Earnings
FOR THE YEAR ENDED DECEMBER 31, 2016
($ in millions)
Balance at January 1 $ 90
Problem 2113
Amount Category
1. Cash collections from customers (direct method). $145,0001 O
1 Summary Entry
2Property, Plant, & Equipment
________________________________________________________________
Beginning balance 247
3 Summary Entry
Accumulated Depreciation
________________________________________________________________
167 Beginning balance
2188 Intermediate Accounting, 8/e
Problem 2113 (concluded)
4 Summary Entry
Retained Earnings
_______________________________________________________________
5 Summary Entry
Problem 2114
SURMISE COMPANY
Spreadsheet for the Statement of Cash Flows
Dec.31 Changes Dec. 31
2015 Debits Credits 2016
Balance Sheet
Assets:
Liabilities:
Accounts payable 32 (7) 15 17
Problem 2114 (continued)
Spreadsheet for the Statement of Cash Flows
(continued)
Dec.31 Changes Dec. 31
2015 Debits Credits 2016
Statement of Cash Flows
Operating activities:
Net income (1) 50
Problem 2114 (concluded)
SURMISE COMPANY
Statement of Cash Flows
For year ended December 31, 2016 ($ in millions)
Cash flows from operating activities:
Net income $ 50
Adjustments for noncash effects:
Cash flows from investing activities:
Cash flows from financing activities:
Issuance of note payable 35
Net increase in cash 5
2192 Intermediate Accounting, 8/e
Problem 2115
Part A: Assuming both companies use current GAAP, not applying the proposed
Accounting Standards Update for lease accounting described in the Chapter
15 Supplement.
Requirement 1
Digital would report the cash inflow of $28,329,472 from the sale of the bonds as a
cash inflow from financing activities in its statement of cash flows.
June 30, 2016*
Interest expense (6% x $28,329,472) ...................... 1,699,768
December 31, 2016**
Interest expense (6% x [$28,329,472 + 99,768]) ..... 1,705,754
Problem 2115 (continued)
Requirement 2
Calculation of the present value of lease payments
$391,548 x 15.32380t = $6,000,000
Calculations:
September 30, 2016*
Leased equipment (calculated above) .............................. 6,000,000
Problem 2115 (continued)
Requirement 3
Digital would report the $6,000,000* direct financing lease of the switching
equipment as a significant noncash investing activity (acquiring one asset and
disposing of another) in the disclosure notes to the financial statements.
Calculations:
September 30, 2016*
December 31, 2016**
Problem 2115 (continued)
Requirement 4
MDS would report the $6,000,000* sales-type lease of the switching equipment
as a significant noncash activity in the disclosure notes to the financial
statements.
2196 Intermediate Accounting, 8/e
Problem 2115 (concluded)
Calculations:
September 30, 2016*
Lease receivable (present value) ....................................... 6,000,000
December 31, 2016**
Problem 2115 (continued)
Part B: Assuming both companies use the proposed Accounting Standards
Update for lease accounting described in the Chapter 15 Supplement.
Requirement 1
Digital would report the cash inflow of $28,329,472 from the sale of the bonds as a
Problem 2115 (continued)
Requirement 2
Calculation of the present value of lease payments
$391,548 x 15.32380t = $6,000,000
Calculations:
September 30, 2016*
Problem 2115 (continued)
Requirement 3
A lessor classifies its cash receipts from lease payments as operating activities
in its statement of cash flows after initially reporting its acquisition of a lease
Calculations:
September 30, 2016*
Lease receivable (PV of lease payments) ......................... 6,000,000
December 31, 2016**
21100 Intermediate Accounting, 8/e
Problem 2115 (concluded)
Requirement 4
MDS would report the $6,000,000* lease of the switching equipment as a
noncash transaction in the disclosure notes to the financial statements.
Calculations:
September 30, 2016*

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